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201003573
<br />4. Fire, Trlaad and Other Hazard Insurance. Borrower shall insure all Improvements on the Property, whether now in
<br />existence or subsequently erected, against any hazards, casualties, and contingencies, Including fire, fox which sender requires
<br />insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. Borrower shall also
<br />insure all improvements nn the Property, whether now in existence or subsequently erected, against loss by floods to the extent
<br />required by the Secretary. All insurance shall be carried with companies approved by Lender. The insurance policies and any
<br />renewals shall be held by Lender and shall include loss payable clauses in favor of, and in a form acceptable to Lender.
<br />In the event of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of lass If not made
<br />promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment for such loss
<br />directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance proceeds may be applied by
<br />Lender, at its option, either (a) to the reduction of the indebtedness Under the Note and this Security Instrument, first to any
<br />delinquent amounts applied in the order in paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair
<br />of the damaged Property. Arty application of the proceeds to the principal shall not extend nr postpone the due date of the
<br />monthly payments which are referred to in paragraph Z, or change the amount of such payments. Any excess insurance proceeds
<br />over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the
<br />entity legally entitled thereto.
<br />In the event of foreclosure of this Security Instrument or other transfer of title to the Property that extinguishes the
<br />indebtedness, all right, title and interest of Borrower in acrd to insurance policies in force shall pass to the purchaser.
<br />5. Occupancy, Preservation, Maintenance and Prot,oction of the Pr~erty; Borrower's Laan Application;
<br />Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days after
<br />the execution of this Security Instrument (or within sixty days of a later sale ar transfer of the Property) and shall eondnue to
<br />occupy the Property as Borrower's principal residence far at least one year aftter the date of occupancy, unless Lender
<br />determines this requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist which are
<br />beyond Borrower's control. Borrower shall notify Lender of any extenuating circumstances. Borrower shall not commit waste or
<br />destroy, damage or substantially change the Property or allow the Property ro deteriorate, reasonable wear and tear excepted.
<br />Lender may inspect the Property if the Property is vacant or abandoned or the loan is in default. Lender may take reasonable
<br />action to protect and preserve such vacant or abandoned Property. Borrower shall also be in default if Borrower, during the
<br />loan application process, gave materially false or inaccurate information ar statements to Lender (or Failed tv provide Lender
<br />with any material information) in connection with the loan evidenced by the Note, Including, but not lzmited tv, representations
<br />concerning Borrower's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold,
<br />Borrower shall comply with the provisions of the lease. if Borrower acquires fee title to the Property, the leasehold and fee title
<br />shall not be merged unless Lender agrees to the merger in writing.
<br />6. Condemnation. The proceeds of any award ar claim for damages, direct or consequential, in connection with any
<br />condemnation ar other taking of any part of the Property, ar for conveyance in place of condemnation, are hereby assigned and
<br />shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Security
<br />Instrument. Lender shall apply such proceeds to the reduction of the indebtedness under the Note and this Security instrument,
<br />fast to any delinquent amounts applied in the order provided in paragraph 3, and then to prepayment of principal. Any
<br />application of the proceeds to the principal shall not extend or postpone the due date of the monthly payments, which are
<br />referred to in paragraph 2, or change the amount of such payments. Any excess proceeds over an amount required to pay aII
<br />outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />7. Charges to Borrower and 1?rntcction of Lender' a Rights in the Property. Borrower shall pay all governmental or
<br />municipal charges, fines and impositions that are not included in paragraph 2. Borrower shall pay these obligations on time
<br />directly to the entity which is awed the payment. If failure to pay would adversely affect Lender's interest in the Property, upon
<br />Lender's request Borrower shall promptly furnish, to Lender receipts evidencing these payments.
<br />if Borrower fails to make these payments nr the payments required by paragraph 2, or fails to perform any other covenants
<br />and agreements contained in this Security instrument, or there is a legal proceeding that may significantly affect Lender's rights
<br />in the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws ar regulations), then Lender may do
<br />and pay whatever is necessary to protect the value of the Property and bender's rights in the Property, including payment of
<br />taxes, hazard insurance and other items mentioned in paragraph 2.
<br />Any amounts disbursed by Lender under this paragraph shall become an additional debt of Borrower and be secured by this
<br />Security Instrument. These amounts shall bear interest from the date of disbursement at the Note rate, and at the option of
<br />Lender shall be immediately due and payable.
<br />Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in
<br />writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien
<br />by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to prevent the
<br />enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to the bender subordinating rite lien
<br />to this Security Instrument. if Lender determines that any part of the Property is subject to a lien which may attain priority aver
<br />this Security Instrument, Lender may give Borrower a notice identifying the lien. Borrower shall satisfy the lien ar take one ar
<br />more of the actions set forth above within 1U days of the giving of notice.
<br />l;CC - 1590-3NE (08/97) Rage 3 of 7 InitiaL~~
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